With a low birth rate, Canada will need immigrants to help drive economic growth. But does our system reward the immigrants most likely to create that growth?
We want skilled workers, or so goes the mantra. But the set of skills most likely to create jobs – entrepreneurship, or that intangible mix of creativity, personal drive and business acumen – gets short shrift in our immigration system.
Immigrants on both sides of the border have been a driving force behind innovation, job creation and entrepreneurship, from Google's Sergey Brin to Intel's Andy Grove, Research In Motion's Mike Lazaridis and Lee Lau, who started ATI Technologies which has since sold for $5.4-billion.
Canada, however, has done a generally poor job of recruiting the most promising entrepreneurs. The federal government recently suspended its entrepreneur-class immigrant program after waiting times ballooned and the number of successful applications dwindled. It says the program needs an overhaul and is studying how to attract and retain innovative entrepreneurs.
Under former rules, entrepreneurs needed $300,000 in net worth, a threshold that deterred many immigrants, young people in particular. The other challenge: waiting times of up to eight years in the entrepreneur class. Immigration lawyer Sergio Karas says that wait is driving away the best and the brightest.
The review comes amid a growing public debate over the level and mix of immigrants entering the country. The discussion isn't just about immigration, though; it plays into the very notion of what kind of a country citizens want Canada to be.
Mr. Karas believes entrepreneurs with a proven track record in their home country should be vaulted to the very top of the priority list, ahead of every other type of newcomer, including skilled workers.
“We need someone who’s going to create the next RIM, or the next Magna. … We should make a commitment as a nation that this is what we want from our immigration system,” Mr. Karas says.
The first step is to attract aspiring entrepreneurs. In that respect, “Canada has lost a bit of its edge in the past few years,” says Andy Jasuja, founder of tech firm Sigma Group, who is based in Toronto but spoke from a business trip in New Delhi. “It still has a good brand, no doubt about it. But these days, countries are competing for talent, and entrepreneurs are in very, very short supply.”
Promising young people nowadays are drawn to Australia, which is aggressively promoting itself to them, says Mr. Jasuja, who started his business in 1990 and now employs 800 people in Canada and India. He believes Canada should market itself to global entrepreneurs more assertively and create a whole “ecosystem” that nurtures new businesses – for example, giving them a tax holiday for the first few years of a startup.
Canada – an innovation laggard – would see rich rewards from getting it right. At every level of analysis, immigrants boost innovation, the Conference Board of Canada has found. Newcomers have disproportionate success in research, spark business ideas, expand trade relations and bring greater foreign direct investment, it said in a study last fall.
In the U.S, a whopping 25 per cent of all venture-backed public companies started between 1990 and 2005 had at least one immigrant as a key founder, including companies such as eBay. Immigrant-founded venture companies are clustered in the most innovative corners of the economy – high-technology manufacturing, information technology and life sciences.
It's not enough to attract them. The next step is to ensure the soil is fertile for them to flourish once they arrive.
Some newcomers arrive in Canada aiming to start a business off the bat. Others turn to entrepreneurship out of necessity, lack of job opportunities or happenstance, and typically face more headwinds. Either way, immigrants are far more likely than Canadian-born people to be self-employed.
Kam Ko fits into the latter category. The Hong Kong engineer started his Ontario business in 1993 by chance, after a customer gave him an extra order to weld parts. The first year was a slog: he couldn’t get a bank loan, so he borrowed start-up money from family. He kept his full-time day job and then toiled in his rented shop as a “janitor, cleaner, engineer, robot programmer and also operator” until one or two in the morning.
The hard work bore fruit. After the first year, he quit his regular job and began to hire others. He got a patent for a new type of ergonomic dental chair. Now his company, Kobotic Ltd., has expanded into robotics and design and exports products worldwide. Nearly all of his 40 employees are newcomers, even though some struggle with English, because he knows how hard it can be to get Canadian work experience.
“I look at entrepreneurs as two types,” he says. “The first have money and experience already. … The second are younger and not as well-to-do, yet they have a lot of ideas and energy. We should make it easier for them.”
Mr. Ko says aspiring entrepreneurs could use something he didn’t have – help navigating the system.
Support needn’t be complicated, or, in this age of austerity, expensive. But so far, much of it has been piecemeal and varies by province and city.
Some schools, such as York University, are running bridging programs to help immigrant professionals adjust to the Canadian labour market. Mentoring and apprenticeships have been shown to improve immigrants’ outcomes, by expanding their networks and giving them Canadian experience.
Social networking sites, such as LoonLounge, which has 52,000 members, make connecting and getting advice easier. This spring, the Business Development Bank of Canada and the Canadian Youth Business Foundation teamed up to announce financing of up to $15,000 for young entrepreneurs who are newcomers. At an entrepreneurial boot camp – aimed at the next 36 young leaders of Canada – half of its inaugural winners are immigrants.
Marion Annau is founder and president of Connect Legal, a new charity that gives legal education and advice to immigrants with few resources who want to start a business. She helps people untangle the complex legalese of contracts, for example, and is seeing demand for her services grow.
“We open the doors to Canada and we say we are the land of opportunity,” she says. “And we get some fantastic talent – the people I deal with are incredibly smart, driven, determined – and we need to harness that talent when it comes.”
By the numbers
Number of immigrants who landed as permanent residents last year as entrepreneurs, down from 820 in 2006.
Percentage of immigrant workers who were self-employed in the late 2000s, compared with 15 per cent of the Canadian-born population.
Percentage of immigrants in 2000 who pursued self-employment because of a lack of job opportunities in the paid labour market.
Average age of immigrant entrepreneurs admitted to Canada last year, at the time of their application.
Percentage of immigrants who entered self-employment voluntarily, motivated by entrepreneurial values, versus 59 per cent among their Canadian-born peers.
Sources: Conference Board of Canada, Citizen and Immigration Canada, Statistics Canada.